If you have been making ends meet on your current salary (ok, it’s probably been a squeeze because you may not have successfully adjusted your spending to offset inflation), then you have a chance to break Parkinson’s Law this year.
‘you have a chance to break Parkinson’s Law this year’
So, if you’re earning R12,000 a month and making ends meet, not starving, and then you get a pay increase, pushing your income up to R13,000, most people at this stage are going to think, “Yay, I have an extra R1,000 to improve my lifestyle.“
It’s normal to want to use your money in this way, but it does not actually help you in the long run, especially if you already have debt.
This year, why not take that increase, whatever it happens to be and either (1) save it for a rainy day or (2) funnel that increase into paying off your debts faster.
The longer you are in debt, the more opportunities you have to mess up and get into trouble while repaying what you owe.
Tip: If you have accounts with high interest rates, try focus paying off those debts (especially if they are smaller debts).
Tip: If you are in debt review, talk to your Debt Counsellor about how you can get the most benefit out of that extra amount each month.
By using your new funds in this way, you can potentially close smaller accounts and start your debt repayments snowballing.
Things are very expensive these days, and you may feel you need to use any increase to cover your increased costs. But before you do that this year, consider (or ask an expert) how you can reduce your monthly expenses. Then you may be able to use the extra funds to save something or to start to settle smaller debts.
Don’t fall into the trap of spending every cent you get each month. Don’t waste your raise by letting your expenses grow to use it all.